Taveras Corporation currently operates at 50% of its available manufacturing capacity. It uses job-order costing with a plantwid predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimate Machine-hours required to support estimated production Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour Required: 1. Compute the plantwide predetermined overhead rate. 2. During the year, Job P90 was started, completed, and sold to the customer for $3,500. The following information pertains to this job: Direct materials Direct labor cost Machine-hours used Compute the total manufacturing cost assigned to Job P90. $ 1,610 $ 1,155 82 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the plantwide predetermined overhead rate. Predetermined overhead rate per MH 215,000 $ 3,655,000 $ 2.00 < Required 1 Required 2 >
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
PREDETERMINED OVERHEAD RATE
Predetermined rate means the indirect cost rate.
The Predetermined overhead rate is an allocation rate that is used to apply the estimated cost of manufacturing overhead to cost objects
Predetermined Overhead Rate is computed by dividing the estimated manufacturing overhead by the estimated activity base.
Predetermined Overhead Rate.
= Estimated Manufacturing Overhead Cost ÷ Estimated Direct Labour Hour
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